By MIGUEL HELFT

Published: November 24, 2006

EVAN WILLIAMS recently bought his freedom. It cost him a bit more than $2 million, and he says it was worth every penny.

I'm not talking about paying off a big debt to one of Tony Soprano's loan-shark underlings. Mr. Williams is a serial entrepreneur, one of those Silicon Valley characters who start company after company. And he purchased his freedom from the venture capitalists and others who financed his company, Odeo. Mr. Williams dug into his pockets and gave them back their money. He got to keep his struggling podcast company and renamed it the Obvious Corporation.

In the process, Mr. Williams, who is 34, has become something of a cause c?bre among a small group of mostly young entrepreneurs who seem determined to turn their back on venture capitalists. They say they yearn for a new entrepreneurship model. They talk about building ''sustainable companies'' suggesting something idealistic in their quest. With comments on blogs urging Mr. Williams to ''keep up the goodness,'' it feels a bit like the birth of a mini-movement in the Valley.

The relationship between venture capitalists and entrepreneurs has always been somewhat contentious. When things go well -- think Netscape, eBay, Google -- everyone gets rich and ends up happy. But often, entrepreneurs struggle with venture capitalists for control of their companies, grow tired of their demands and complain that their businesses get hijacked by financiers dead set on hitting a home run.

For most of the Internet age, and even before, there was little tech entrepreneurs could do about it. Without venture money, they had little chance of turning their ideas into businesses.

But things are changing. Entrepreneurs have figured out how to build Internet companies cheaply, as the cost of software, hardware and bandwidth has plummeted. Silicon Valley is teeming with successful entrepreneurs who got rich in recent years and are eager to fund their new enterprises, or those of their friends.

These angel investors typically don't push entrepreneurs as hard as venture capitalists do. And many young companies are getting bought for $5 million, $10 million or $20 million. Most venture capitalists won't get out of bed for that kind of ''exit.'' But for a young entrepreneur, it can be life changing.

Even in this environment, the story of Odeo stands out. The company was born last year amid much hype. It landed substantial financing -- $4 million from Charles River Ventures and $1 million from a star-studded cast of angel investors. Yet little more than a year later, Odeo was going nowhere. Traffic had stalled and it was not clear how the company would ever make money.

In candid posts on his blog, Mr. Williams chronicled Odeo's story, warts and all. He admitted to making mistakes. Getting too much venture money too early was one of them. It made it harder to persuade the board and the company's 14 employees to change course when, for example, Apple Computer introduced a competing product that cut into Odeo's prospects. ''It's a bigger ship to turn,'' Mr. Williams said.

Failure stories are common in Silicon Valley. But the notion of an entrepreneur buying out those who put up the risk capital is virtually unheard of.

This do-good gesture cost Mr. Williams a bit more than $2 million of his own money. It's a gesture he was able to do because he made a bundle when he sold Pyra Labs, a blogging technology company he co-founded, to Google in 2003.

The best thing about the newly renamed Obvious, Mr. Williams said, is that he controls its destiny. He wants it to become a sort of idea factory that can spawn project after project, perhaps not unlike a media company that starts magazine after magazine. Obvious already has two projects, Odeo, which soldiers on, and Twitter, a blogging-like tool for quick updates.

''I just wanted to create a company that would be as much fun and as fulfilling as possible,'' Mr. Williams wrote on his blog. ''Fun in work to me means a lot of freedom, and tons of creativity, working with people I respect and like, and pursuing ideas that are just crazy enough to work. I don't want to have to worry about getting buy-in from executives or a board.''

Nice work if you can get it. Mr. Williams readily admits that he's been able to do what he did because he is already rich. But he said that Obvious was a real business that could end up making him even more money than Pyra Labs, he said.

Judging by the kudos ricocheting across the technology blogosphere, Mr. Williams doesn't lack for kindred spirits.

''He comes off like a folk hero to other entrepreneurs,'' said Mark Pincus, a serial entrepreneur whose company, Tribe, has languished despite receiving $9.5 million in venture financing. ''We need a model that allows for more experimentation and play.''

No one believes that Mr. Williams and his fellow idealists are endangering Silicon Valley's venture capital industry. The Obvious model ''may be a good fit for Evan, who is very creative, but I don't think you can grow a lot of companies that way,'' said Ariel Poler, a successful serial entrepreneur and one of Odeo's angel investors.

Even Mr. Williams acknowledged that Obvious might some day spin out a company that needed venture capital. But he hopes that before then, he will help show entrepreneurs a new way. ''It's about building Web properties that are interesting and worthwhile and potentially make money but are not runaway YouTube-like successes or considered a failure,'' he said.

Photo: Evan Williams, a serial entrepreneur in Silicon Valley, bought out the investors who backed his company. (Photo by Peter DaSilva for The New York Times)